Italy’s economy is growing more than expected which means more fiscal space to aid families and businesses, Finance Minister Giancarlo Giorgetti said.
(Bloomberg) — Italy’s economy is growing more than expected which means more fiscal space to aid families and businesses, Finance Minister Giancarlo Giorgetti said.
The country’s unexpected 0.5% growth in the first quarter of this year “creates some margins for new interventions in the fall to support businesses and families struggling with inflation,” Giorgetti told newspaper Il Sole 24 Ore in an interview Saturday.
The outcome for first-quarter economic growth was more than twice as much as economists anticipated. That might fuel the prospect that Italy can meet the government’s 1% growth target for 2023, which could additionally buy fiscal space to deliver aid.
The Bank of Italy said Friday that Italy must keep working to reinvigorate its growth potential to keep the public finances on track in the face of rising interest rates. Just hours after data showed the euro zone’s third-biggest economy returned to expansion with a surprisingly strong 0.5% surge from the prior three months — outpacing France and Germany — the central bank warned that underlying challenges haven’t gone away.
Giorgetti also said that Italy’s finances are solid and improving which means he sees no reason for any ratings agencies to make any changes when its review periods come up in May.
Regarding the European Union’s stability pact which is being renegotiated, the minister said there’s room for negotiation and he still believes Italy’s request for separate treatment of certain investments makes sense. Those investments that create growth should be considered differently.
Asked about calls from EU partners for Italy to ratify a reform of the European Stability Mechanism bailout fund, Giorgetti said the government is seeking progress on completing a banking union and on issues including boosting European guarantees to promote private investments.
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